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Fossils Cheer, Climate Absent as Canada, Mexico, U.S. Reach New Trade Deal

North American fossils were cheering early this week and climate protection was out of the picture as Canada signed on to the United-States-Mexico-Canada Agreement (USMCA), the trade deal formerly known as NAFTA.

While dueling analyses dug into the implications for dairy and international trucking, steel tariffs and auto sales, critics were quick to point out that the agreement makes no mention of climate change. The fossil industry was looking ahead to a big bonanza. And the Council of Canadians was declaring at least one victory, with the elimination of a “proportionality” clause in NAFTA that was seen as a brake on Canada’s ability to rapidly reduce carbon-emitting fossil production and exports to meet its international climate commitments, if/when it ever decides to.

“With the original NAFTA agreement, we were very worried that it would take away our energy sovereignty,” said CoC trade campaigner Sujata Dey.

Environmental groups “panned the accord,” Grist reports, “arguing it includes ‘corporate giveaways’ for fossil fuel giants, excludes binding agreements on lead pollution, and contains no mention of human-caused global warming.” Even where the new deal appears to improve on the old—in a controversial investor-state dispute resolution process under NAFTA that was seen to favour corporate rights over local environmental regulation—the fossil industry is exempt.

“The new deal limits those rights, with one major exception: U.S. oil and gas companies,” Grist states. “Under the rules, firms that have, or may at some point obtain, government contracts to drill or build infrastructure like pipelines and refineries in Mexico―such as ExxonMobil Corporation―can challenge new environmental safeguards Mexican President-elect Andrés Manuel López Obrador has vowed to erect.”

“It’s like saying, ‘From here on, we’re going to protect the henhouse by keeping all animals away, except for foxes, they’re cool,’” said Ben Beachy, director of the U.S. Sierra Club’s living economy program.

And “that’s not the only giveaway for the oil and gas industry,” Grist notes. “The updated deal, which requires [U.S.] congressional approval [as well as approval by the Canadian parliament and Mexican senate—Ed.], preserves a provision that requires the U.S. government to automatically approve all gas exports to Mexico, despite another rule mandating regulators consider the public interest.”

The deal also “tosses aside a standard set of seven multilateral environmental agreements that undergirded the last four U.S. trade deals. USCMA includes enforcement language taken from just one of the environmental accords, weakens the language from another two, and makes zero mention of the other four.”

“Trump’s trade agreement with Mexico and Canada is a corporate giveaway intended to sharply limit the powers of government to protect people and the planet,” said Doug Norlen, director of economic policy at Friends of the Earth U.S. “This agreement is an attack on our ability to hold Big Oil and Gas accountable for the damage they cause to our communities.”

“We expect that, after Trump is out of office, we’re going to have to work hard to re-regulate,” Sierra Club’s Beachy added. “Even after [he] leaves office, Trump’s NAFTA (revision) could extend his polluting legacy for years.”

National Observer notes that the deal does include references to forests as carbon sinks, “air pollution” and “pollution from ships,” tracking air quality data, and cooperation on ozone-depleting substances.

But small wonder that U.S. fossils “urge Congress to approve” the USMCA, in the words of the American Petroleum Institute’s Mike Summers. “Retaining a trade agreement for North America will help ensure the U.S. energy revolution continues into the future.”

The Canadian fossil lobby was just as pleased with the outcome of the eleventh-hour negotiations leading up to the USMCA. “The uncertainty in whether NAFTA would exist was definitely having an impact on the market,” Nick Schultz, vice-president of pipeline regulations at the Canadian Association of Petroleum Producers (CAPP), told CBC. “It is, of course, not the only issue we have with competitiveness and investors, but [a trade agreement] is an important step.”

“This is very upbeat news,” Bank of Montreal deputy chief economist Michael Gregory told Bloomberg. “There was a lot of NAFTA uncertainty weighing on economy, stocks, with equities underperforming.” But between the USMCA deal and word of a final investment decision on the C$40-billion LNG Canada megaproject in British Columbia, Gregory foresaw an increase in economic activity.

“Canadian assets may finally begin to feel some love,” Bloomberg writes. “The flurry of developments on trade and energy lift an overhang that’s held back business investment and growth in the world’s 11th biggest economy.”

CAPP’s Schultz said the agreement appears to have addressed a “border bottleneck” that was costing Canadian fossil exporters $50 to $60 million per year, CBC reports. “Under the old NAFTA rules, oil and gas producers had to prove the origin of their product right back to the wellhead if they were to be exempt from duty at the border.” But that was easier said than done with the light oil diluent that fossils must add to tar sands/oil sands bitumen to get it to flow through a pipeline.

“Before Canadian oil travels, it comes from different producers and is mixed in tanks and traded multiple times,” Schultz explained. While the new USMCA allows a proportion of diluent in the exported product with no fee for exporters, he said it’s too soon to say whether they’ll still have to fill out extensive paperwork for their product.

After 14 months of awkward, often tortuous negotiations, Donald Trump predictably bragged about the deal in grandiose terms. But some analysts cast it as a relatively small adaptation of the original NAFTA.

“After spending a year and a half alienating our friends, punishing our farmers and manufacturers with devastating tariffs and counter-tariffs, and fracturing the hard-won alliance we had built to isolate and pressure China, we finally got a new trade deal—and a ‘new’ trade strategy,” writes Washington Post columnist Catherine Rampell. “Yet somehow, they look an awful lot like the old ones.”

Perhaps most notable, though, was the permalink for Rampell’s post, which would have been unchanged after a desk editor adjusted what might have been her original headline for the story: “trump-didnt-blow-up-our-trade-system-whoop-de-doo”.

2 Comments (Open | Close)

2 Comments To "Fossils Cheer, Climate Absent as Canada, Mexico, U.S. Reach New Trade Deal"

#1 Comment By Frank White On October 4, 2018 @ 5:05 PM

NAFTA SCHNAFTA — Just one more nail in civilization’s coffin. if atmospheric physicist, Dr. Tim Garrett is right, whether NAFTA addresses the climate crisis or not are moot. Garrett, makes a decisive case that humanity is facing a global civilization / economic collapse by the end of this century. His research indicates that we’re caught in a double-bind between a collapsing global economy with zero GDP, and an explosive growth in CO2 emissions to levels of 1200 ppm. To dramatize the implications, Garrett says our only hope would be to build the equivalent of one nuclear plant per day globally. There’s apparently no way out.
Garrett, at the University of Utah, published his initial findings way back in 2008 in a 19-page paper titled: “Are there basic physical restraints on future anthropogenic emissions of carbon dioxide?” So how come so few news and information outlets — Energy Mix included — and no politicians that I know of, mention Garrett and his research? I suspect we all know the answer to that question, but are afraid to speak it publicly.

To read more by/about Garrett and his research, and why he is adamant that there is no solution, you might consider visiting my website link: https://tinyurl.com/ya5qj9pd The title of this page is: “Civilization/Economic Collapse ~ Links to All Posts By or About Dr. Tim Garrett’s Research”

#2 Comment By Mitchell Beer On October 5, 2018 @ 7:33 AM

Well, we wouldn’t be inclined to report on “research” that suggests one nuclear plant per day as the only pathway to a climate solution, because we try to specialize in content that is credible, accurate, and practical. That’s not at all to downplay the severity of the crisis. But there are solutions, too, that don’t involve bankrupting utilities and economies — something nuclear is pretty much built to do, with its track record for rarely encountering a project budget it couldn’t vastly exceed — or irradiating local communities, as in Fukushima. If Garrett *were* right, if that were the only available option, we’d be worried! We write extensively about solutions that do work, right here, right now, and the 11,000+ stories in our archive are open to all.